San Diego Rules & Economic Development Committee Meeting Summary - April 24, 2013
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San Diego Rules & Economic Development Committee Meeting Summary - April 24, 2013
The Committee on Rules and Economic Development met on April 24, 2013, at 9:00 a.m. in the Council Committee Room (12th Floor) of the City Administration Building. Council President Pro Tem Sherri Lightner (Chair), Councilmember Kevin Faulconer (Vice Chair), Councilmember Mark Kersey, and Councilmember David Alvarez were present. Councilmember Marti Emerald was absent for the first item but participated later. The meeting covered four agenda items: a mid-year performance update from the San Diego Convention Center Corporation, a report on the CONNECT2Careers summer jobs program, a timeline for elections-related code and charter updates, and a status update from the City Funds Commission.
Approval of Record of Action Items
- The committee unanimously approved the Record of Action Items from the April 10, 2013 meeting (4-0; Emerald absent).
San Diego Convention Center Corporation Mid-Year Performance Update (Item 1)
- Presenters: Phil Blair (Board Chair, SDCCC), Carol Wallace (President & CEO, SDCCC), Joe Terzi (President & CEO, San Diego Tourism Authority, SDTA).
- Key reports:
- Since 1989, the Convention Center has generated over $21 billion in economic impact, hosted nearly 5,000 events, drawn over 18 million attendees, produced nearly 13 million hotel room nights, and generated over $400 million in Transient Occupancy Tax (TOT) revenue.
- The Convention Center supports an estimated 12,500 jobs currently; expansion could add 7,000 permanent jobs, bringing the total to nearly 20,000.
- The expansion is estimated to generate an additional $17 million in annual city revenues.
- Performance metrics:
- FY13 goal for hotel room nights increased from 850,000 to 900,000. Through March, the center was at 46% of goal, on pace, but Joe Terzi stated he did not expect to meet the 900,000 goal and projected a shortfall of 75,000–150,000 room nights.
- The short-term (18 months and in) sales goal of 40,000 room nights was at 35,000 booked through March.
- Challenges:
- Two major conventions (HIMS and Society for Human Resource Management) announced they would leave San Diego due to lack of exhibition space, despite the planned expansion.
- Comic-Con is booked through 2016 but has indicated it will move if expansion does not occur.
- Discussion:
- Councilmembers expressed concern about the lack of actionable metrics in the report and the need for tracking performance of the contract with SDTA.
- Councilmember Emerald questioned the $1.9 million annual allocation to SDTA and requested analysis of discounting practices, the split between SDCCC and SDTA bookings, and detailed revenue data.
- Councilmember Faulconer praised the team's professionalism and emphasized the importance of the expansion.
- Decision: The committee unanimously (5-0) voted to request the Office of the Independent Budget Analyst (IBA) review the Sales and Marketing Services Contract and work with SDCCC to identify additional performance measures for a report to City Council in July 2013. The requested measures include occupancy, revenue maximization, General Fund subsidy reduction, reserve fund growth, maintenance needs reduction, parameters for discounting, long-term sales/marketing plans, and status on the Coastal Commission approval.
CONNECT2Careers San Diego Program Update (Item 2)
- Presenters: Ashley Wildrick, Jared Aker (EDC, co-chair of Workforce Partnership Youth Council), Phil Blair (honorary chair), Erica Quintero and Viviana Cervantes (student applicants).
- Key updates:
- The program, formerly known as Hire-A-Youth, aims to place 200 young adults in summer internships.
- As of the report date, 376 applications had been received (deadline April 15), 19 application/work-readiness workshops had reached 549 young adults, and over 60 employers had expressed interest with 45 committing, translating to over 100 job positions.
- A successful first placement was Zachary, a 10th grader, placed with Northrop Grumman.
- Discussion:
- Councilmember Emerald highlighted the successful job fair in City Heights (around 2,000 jobs offered, 300+ kids applied on-site).
- Councilmember Lightner noted the need for more business participation and planned to connect a youth in her office.
- Councilmember Faulconer praised the program's professionalism and asked what more the Council could do; presenters requested help recruiting more employers.
- Action: Informational only; no formal action taken. The committee requested regular future updates on the program.
Elections-Related Municipal Code and Charter Updates (Item 3)
- Presenter: City Clerk Liz Maland and Deputy Director Bonnie Stone.
- Key issues:
- Inauguration Date: Current charter requires inauguration on first Monday after December 1, which conflicts with the 28-day certification period for election results (potentially extended to 31 days by Senate Bill 29). Proposal to change the date.
- Special Elections: Charter requires a runoff 49 days after a special primary, but state law mandates 45 days for mailing overseas ballots, making compliance impossible. Proposal to amend the charter.
- Redistricting: Review of charter and code sections based on past commission recommendations and a 2012 grand jury report; timeline for a 2016 ballot measure.
- Municipal Code Review: Potential updates to nomination deadlines, ballot candidate photos (electronic submission), petition processes, and internal consistency.
- Public Comment: Robert McNamara (District 3) suggested a citizen charter review committee, referencing past charter revision efforts and unaddressed recommendations.
- Discussion: Councilmember Alvarez expressed interest in referendum process changes; Councilmember Emerald raised the possibility of a 'menu' approach to charter amendments.
- Decision: Unanimously (5-0) voted to request the City Clerk and City Attorney to research appropriate changes to address the Inauguration Date and Special Election issues and report back with proposed Charter and Municipal Code revisions at the July 10, 2013 committee meeting.
City Funds Commission Status Update (Item 4)
- Presenters: David Walter (Chair, City Funds Commission), Michael Glavin (Investment Consultant).
- Overview:
- The Commission oversees six funds: four library funds (Allied Gardens, North Park, Rancho Bernardo, La Jolla), a Penasquitos Canyon Preserve Fund, and the Mt. Hope Cemetery Perpetuity Fund.
- Five funds have a 65% equity/35% fixed income allocation; the Cemetery Fund is 35% equity/65% fixed income due to its income requirement.
- Performance: As of March 31, 2013, funds were performing well, with the five library funds ranking in the top decile of a peer group of over 1,000 constituents. The Cemetery Fund yielded about 4% cash-on-cash, below the 5% target.
- Discussion:
- Councilmember Emerald expressed concerns about the long-term viability of Mt. Hope Cemetery, given that 80% of sale proceeds go to maintenance and the fund's principal cannot be touched. She requested the IBA examine income generation, city contributions, and future land-use projections.
- The commission noted that a charter amendment could allow more investment flexibility, but spending principal would be counterproductive.
- Action: Informational only; no formal action taken. The committee requested the IBA work with the City Treasurer to study Mt. Hope Cemetery's finances and options for growing the Perpetuity Fund, including potential charter amendments.
Key Outcomes
- Item 1: Unanimous vote (5-0) to have the IBA review the SDCCC/SDTA contract and produce a performance report with specific metrics for City Council in July 2013.
- Item 2: No formal action; committee requested future updates on CONNECT2Careers.
- Item 3: Unanimous vote (5-0) to direct the City Clerk and City Attorney to research and propose charter/municipal code changes on inauguration date and special elections by July 10, 2013.
- Item 4: No formal action; committee requested the IBA to report on Mt. Hope Cemetery funding and investment options.
The meeting adjourned at approximately 11:30 a.m. The next regular meeting was scheduled for May 15, 2013, at 9:00 a.m.
Meeting Transcript
Welcome to today's meeting of the rules of economic development committee. Let the record reflect we have a form consisting of Vice Chair Faulkner, Councilmember Kerzy, Councilmember Alvarez, and myself. Also here with us are the committee staff, including Priscilla Dugard from the Office of the City Attorney, Jeff Kwar from the Office of the Independent Budget Analyst, Francisco Estrada from the Mayor's Office, and Nika Bukolova committee consultant. I want to thank you all for being here. We have a couple of committee members who are pressed for time today, so we plan to end the meeting by 1130. We are going to begin the agenda with non-agenda public comment. So far we have no non-agenda public comment and we have none for regulatory streamlining open government and economic development. Moving on to committee comment. Is there any committee comment? Any comments from the City Attorney IBA or mayoral staff. Our first order of business is approval of the minutes from our evening meeting on April 10th, 2013. Motion by Councilmember Alvarez, second by uh Vice Chair Faulkner to approve the minutes of our April 10th, 2030 meeting. All in favor, please say aye. Aye. Motion carries unanimously. Moving to the action discussion agenda, our first item is information only. It's a report from the San Diego Convention Center Corporation regarding the San Diego Convention Center Corporation mid-year performance update. I welcome Phil Blair, Board Chair of the San Diego Convention Center Corporation, and Carol Wallace, President and CEO of the San Diego Convention Center Corporation. Also joining us today is Joe Turse, President and CEO of the San Diego Tourism Authority. And I thank you all for being here, especially Mr. Tursey. I look forward to your presentations and uh your responses to all the questions. Maybe. It's a pleasure to be here. I'm Phil Blair. I am the current chair of the board of the San Diego Convention Center Corporation. The old white button, huh? With me today to provide you with a mid-year update on the performance of the convention center is our President CEO Carol Wallace, which I think all of you know. I want to start today to thank all of you for your strong support of the Convention Center Corporation and our mission to drive economic impact in jobs throughout the region. As you will hear today, the center is the cornerstone of our third largest industry, the visitor industry. We stand at a critical time in our corporation's efforts to build on more than 23 years of success as we are in the final stages of the proposed expansion of this facility. Your support has been critical, and we must work hard together to ensure that we are able to realize this very important project. Our presentation is relatively short so that we can provide enough time for any QA that you might have. Since opening in 1989, the Center has generated more than 21 billion in economic impact in our region by hosting nearly 5,000 events that have drawn over 18 million attendees. Those events have produced nearly 13 million in hotel room nights and generated over 400 million in dollars in TOT revenues that have helped pay for our city's libraries, police, fire, and roads. But most importantly, especially from my role, it has been a driver of jobs in our region. The current facility is directly or indirectly responsible for an estimated 12,500 jobs across the region. While many are directly tied to the visitor industry, jobs in manufacturing, transportation, retail, agricultural, utilities, communications are also part of this mix of jobs as they support our tourism industry. The expansion of our convention center comes at a time when our economy is slowly recovering from the economic downturn, but we have much more to do to get San Diegans back to work. Putting a shovel in the ground on the expansion is a great start as an estimated 3,000 construction related jobs will be created from the expansion build out alone. These are high-skilled, high-paid jobs that our economy needs to continue to grow even stronger. Once the doors of the expansion are open, nearly 20,000 jobs in our region will be tied to the events in the center. Clearly, the center is a huge economic engine. It is our estimate that because of the expansion that we will add 7,000 jobs, permanent ongoing jobs, which is how we got from the 12,500 to the 19,500. If we were sitting here and a company contacted us and said, I want to move to San Diego and open a facility and I'm going to hire 7,000 San Diegans, we would be pretty darn excited about them coming into our community. That's how we need to think of this expansion for our community. In terms of charts and detail, the impact of the expansion is on your screen. The City of San Diego is expected to receive an additional 17 million in new revenues because of the expansion. In March, we received a favorable opinion from the courts validating the financing mechanisms created by this council. It was a huge milestone and a very critical step in our progress.
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